New Tools Calculate Eligibility for Health-Care Subsidies

Confused about whether you qualify for health-care and government tax credit subsidies? Two new online tools help users calculate their eligibility.

The pending launch of HealthCare.gov’s new Marketplace on Oct. 1 has many wondering if they’ll qualify for a health-care plan on the new platform, and if so, will they qualify for government tax subsidies.

To help ease some of the confusion, both the Henry J. Kaiser Family Foundation and TurboTax have launched online subsidy calculators for individuals to figure out how much in tax credits they could potentially receive based on the new plans that will be available for open enrollment starting next week.

The new Bronze, Silver and Gold plans each vary on how much coverage one would get (Bronze being the least comprehensive, Gold being the most). In few cases, low-income individuals under the age of 30 may qualify to enroll in the “Catastrophic Plan,” which includes three primary care visits per year, but requires the individual to pay all medical costs to a certain point, according to HealthCare.gov.

Let’s Make a (Subsidy) Deal

Both subsidy calculator tools require individuals to input personal information like state of residence, ZIP code, annual income and whether their employer has health-care coverage available to them. Kaiser’s tool displays a series of questions on one page, whereas TurboTax’s tool walks the individual through each question one by one.

To demonstrate how the subsidy calculator works, Government Technology generated three fictitious scenarios and plugged them into the calculators to see what kind of subsidies were available in each situation. Below are the three hypothetical scenarios.

The St. Louis, Mo., Single Man/Woman

A single, 28-year-old nonsmoker living in St. Louis, Mo., who earns an annual salary of $28,000 but is not offered health insurance at his/her current place of employment could qualify for coverage with an annual subsidy of $2,192 (based on the Silver plan). This would cover 80 percent of the total premium, which would be $2,756.

On this plan, the government would also provide a tax credit subsidy of up to $564 (representing the other 20 percent of the overall premium).

(Estimate based on the Kaiser calculator.)

The Sacramento, Calif., Family of Four

This family of four consists of a father (a 42-year-old nonsmoker), a mother (a 40-year-old smoker) and two children, living in Sacramento, Calif. While both parents hold jobs, they collectively earn an annual household income of $37,000 and neither of their employers offers health-care coverage.

In California, the fact that the mother of this family is a smoker, won’t put them at risk of paying more for health care. According to federal laws, states are allowed to charge smokers up to 50 percent more for a health-care plan.

The annual premium for this family would be $1,601. Under the Silver plan, this figure represents 13 percent of the coverage's total cost of $12,237. Their annual tax credit subsidy, then, would be $10,636.

(Estimate based on the Kaiser calculator.)

The Colorado Single with Insurance

Some working individuals may already be insured without going through their respective employer. A 35-year-old unmarried Coloradan with no kids, who is already insured (not through his/her employer) and earns $42,000 annually, may qualify for financial assistance on health care.

According to the breakdown, the individual would qualify for health coverage with a $322 monthly premium. Government subsidies in this case would pay for $40 of that monthly total, making the monthly out-of-pocket cost $282.

(Estimate based on the TurboTax calculator.)

Although TurboTax tells the individual exactly how much the out-of-pocket premiums are, the calculator does not say what plan (Bronze, Silver or Gold) is reflected in the results.

In 2008, Sarah Rich graduated from California State University, Chico, where she majored in news-editorial journalism and minored in sociology. She wrote for for Government Technology magazine from 2010 through 2013.